Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual

BSA/AML Examination Procedures

Procedure

Comments

5. Determine whether the bank has established a general due diligence program that includes appropriate, specific, risk-based, and, where necessary, enhanced policies, procedures, and controls for correspondent accounts established, maintained, administered, or managed in the United States for foreign financial institutions (“foreign correspondent account”). The general due diligence program must be applied to each foreign correspondent account. Verify that due diligence policies, procedures, and controls include: • Determining whether any foreign correspondent account is subject to EDD. • Assessing the money laundering risks presented by the foreign correspondent account. • Applying risk-based procedures and controls to each foreign correspondent account reasonably designed to detect and report known or suspected money laundering activity, including a periodic review of the correspondent account activity sufficient to determine consistency with information obtained about the type, purpose, and anticipated activity of the account. 6. Review the due diligence program’s policies, procedures, and processes governing the BSA/AML risk assessment of foreign correspondent accounts. Verify that the bank’s due diligence program considers the following factors, as appropriate, as criteria in the risk assessment: • The nature of the foreign financial institution’s business and the markets it serves. • The type, purpose, and anticipated activity of the foreign correspondent account. • The nature and duration of the bank’s relationship with the foreign financial institution and any of its affiliates. • The AML and supervisory regime of the jurisdiction that issued the charter or license to the foreign financial institution, and, to the extent that information regarding such jurisdiction is reasonably available, of the jurisdiction in which any company that is an owner of the foreign financial institution is incorporated or chartered. • Information known or reasonably available to the bank about the foreign financial institution’s AML record. 7. Ensure the program is reasonably designed to: • Detect and report, on an ongoing basis, known or suspected money laundering activity. • Perform periodic reviews of correspondent account activity to determine consistency with the

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